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Nobody's Laughing About These Clowns

January 15, 1987|DON G. CAMPBELL | Times Staff Writer

Question: About September of 1985, I read an advertisement that said: "Assemblers wanted . . . send for information."

Needing a job, I sent for the information. It was a toy company in Florida. They wanted people to put some clowns together for them at $6 a clown. There was a refundable materials fee, which I paid, then I could put together my clowns. When completed, I sent my clowns by UPS to Florida and waited to receive my money.

They sent me a letter to notify me that they had received my clowns and would soon send payment for them. After a few months went by, I sent a letter asking for payment, and they answered, in no time, and told me that my check would be along in a few weeks.

Another Letter

I waited a few months and then sent another letter, this time demanding payment. They responded quickly and told me that they were "having financial difficulties and that debts would be paid in the order that they could."

Because these people are in Florida, I don't know how to sue or get my money back. Can you help me? The name of the company is Elan Vital. I hope you can print this because I don't want others to get ripped off. Last summer I saw the same ad being used again.--J.D.I.

Answer: As a postal inspector in Fort Pierce, Fla., who investigated the case, but who wishes to remain anonymous, said: "The tough part about 'work-at-home' operations like this is that they suck in all of the people who can least afford to lose the money--elderly people on a fixed income trying to make a little extra money, shut-ins and people who are out of a job. The company's no stranger to us."

Nor is it to Fred Hochsztein, assistant attorney general in Florida, who is based in Miami and heads up the office's consumer unit.

Based on "a flood of complaints" early last year about Elan Vital, Hochsztein obtained an Assurance of Voluntary Compliance (a consent decree) against principal Robert Marks, under which "he agreed to discontinue the practices causing all of the consumer problems."

May Get a Refund

In nine out of 10 cases in "work-at-home" schemes, this is about as much satisfaction as the consumer can expect, but Hochsztein says the Elan Vital case is a rarity in that you may get your money back. It may be a first.

As the toy scheme worked, the consumer paid $6 apiece for the material to make the clowns, which was refundable, plus a small security deposit.

"They came in packets of 10 clowns," he adds, "but the consumer could buy as many packets as he wanted to start with. When he sent in his 10 completed clowns, he was supposed to receive $120: $60 as a refund on the material and $60 as his profit for the work."

Once the Assurance of Voluntary Compliance was signed, the company, sure enough, began making restitution and settling claims against it.

"But they kept on advertising and changed their product," Hochsztein says. "They switched from clowns to hooked rugs and, instead of putting up a refundable $6 a clown for materials, consumers were having to put up $7.14 per rug."

In other words, if you had responded to the second Elan Vital ad you saw last summer, you might have been surprised to find yourself being pitched to assemble rugs instead of clowns.

A combination of bad publicity about the clowns, "plus the fact that they were paying off all those people," soured the hooked-rug approach, Hochsztein adds. "And last June or July, Elan Vital's cash flow turned around, and they went bankrupt right in the middle of trying to clean up their act. They've been out of business since then."

No criminal complaints have been filed against Marks, Hochsztein adds, none are contemplated, and attempts by The Times to contact Marks through his Boca Raton, Fla., attorney were unsuccessful. What's the bright side of this otherwise tarnished coin? Why is this case more encouraging than 99 out of 100 work-at-home schemes put out of business? Ironically, it's in the clowns you labored over.

"Two things happened that made this different," Hochsztein says. "First, Elan Vital ended up with warehouses full of clowns, which have turned out to be an asset. And, secondly, as a part of the Assurance of Voluntary Compliance that we got them to sign, they agreed to post a $50,000 letter of credit to compensate consumers like the person who wrote to you--which they did, thanks to the salability of the clowns."

The $50,000 kitty is currently being held by the Florida Division of Consumer Services of the Department of Agriculture. What does the Department of Agriculture have to do with clowns--or hooked rugs? Not a thing, Hochsztein concedes; it's just a statutory quirk in Florida law.

How do you get your money back? First, copy all of your correspondence, receipts, invoices and what-not involved in your brush with Elan Vital, and send them directly to Hochsztein, who will see that they get to the right hands in the Department of Agriculture: Fred Hochsztein, Assistant District Attorney, Florida Attorney General's Office, 401 Northwest 2nd Ave., Miami, Fla. 33128.

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